Indonesia's poor get fuel subsidy

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INDONESIA will make cash payments to its poorest 62 million
citizens this month to compensate for rising fuel prices, providing
the basis for an ambitious social security system planned by
President Susilo Bambang Yudhoyono.

Information Minister Sofyan Djalil said yesterday that a weekend
cabinet meeting had decided to distribute 300,000 rupiah (about
$A40) to 15.5 million households.

"This is a good start for introducing a social security system
in this country," Mr Djalil said.

The first payment covers the three months until December, after
which the system could be reviewed. "Before the oil price is raised
we want to make sure that the most vulnerable group in society will
not face hardship," Mr Djalil said.

Rising oil prices are crippling Indonesia's budget. Mr Djalil
said the Government was facing a $15 billion blow-out due to heavy
subsidies of petrol and kerosene prices.

The subsidies would be cut next month, he said. It is believed
they could be halved, possibly causing massive social unrest in the
impoverished nation, where many depend on kerosene for cooking.

"We plan to raise the oil price enough to share the burden," Mr
Djalil said. "Therefore we will pay 15.5 million households a
direct cash payment as a cushion so that when we raise the oil
price the shock created by the oil price increase won't hurt them
too much.

A census undertaken by the Government identified 62 million
Indonesians surviving on incomes of less than $A25 a month. The
first comprehensive survey of poverty in Indonesia found the
poorest 16 million were struggling on less than $A18 a month, Mr
Djalil said.

The Government would bypass existing bureaucracy, which has been
criticised for siphoning off previous compensation deals, by using
the postal system.

A list of the 15.5 million poorest households had already been
drawn up and these would be issued an identity card enabling them
to collect the payment from the post office by the end of the
month, Mr Djalil said. "Once the money has reached the poor, the
oil price can be increased."

Some of the most marginalised and impoverished could miss out on
the payment, Mr Djalil admitted, with the census based on
residential address and home village.

In 1998 a fuel price rise provoked riots that contributed to the
fall of President Soeharto.

Dr Yudhoyono yesterday instructed ministers to ensure the
compensation reached those in need.

"I do not want poor people who are eligible for the fund not to
receive it because the money has instead gone to state officials'
families who are not poor," Dr Yudhoyono was quoted by news agency
Antara as saying.